May 8, 2013 Karen Pepping Dear Karen:
May 8, 2013
Xxxxx Xxxxxxx
Dear Xxxxx:
On behalf of Xxxxxxxx & Struggles, Inc. ("HSI" or the "Company"), I am pleased to confirm
the terms of your promotion to the position of Senior Vice President, Chief Accounting
Officer and Controller of the Company in this letter agreement (the "Agreement"). All
amounts in this Agreement are denominated in U.S. dollars. This Agreement shall constitute
the entire agreement between you and the Company relating to your employment, and shall
supersede all prior agreements, arrangements, representations or promises, whether oral or
written.
1. Effective Date: The effective date of this Agreement shall be May 8, 2013.
2. Title: You will serve as Senior Vice President, Chief Accounting Officer and
Controller, reporting directly to the Executive Vice President and Chief Financial
Officer.
3. Location: You will be based in the Company's Chicago Corporate office.
4. Base Salary: You will receive a monthly salary of $22,083.33 (which is equivalent to
$ 265,000.00 annually) payable at the end of each month.
5. Management Incentive Plan (MIP) Participation: You will participate in the MIP at the
Tier II level. Consequently, you will receive consideration for annual equity grants as
part of your performance and compensation review. Annual equity awards are subject
to the approval of the HRCC.
6. Management Bonus: You will be eligible for a target management bonus equal to
50% of your base salary. For 2013, you will be eligible for a target
management bonus equal to $113,623.29, which reflects the pro ration of your
target management bonus for the period February 25, 2013 to December 31,
2013. Notwithstanding the foregoing, for 2013 you will be eligible for a bonus
of not less than $56,811.64 (this reflects 50% of your pro-rated target bonus),
subject to your continued employment with the Company. Bonuses earned and
payable beyond 2013 will be payable per the Company's policy at that time.
All bonuses are discretionary and are not earned until reviewed and approved by the
Human Resources and Compensation Committee ("HRCC") of the Board of Directors
of Xxxxxxxx & Struggles International, Inc. ("HSII"), the parent company of HSI.
Bonuses are only payable if you are employed by the Company on the date such bonus
is paid.
7. Incentive Compensation and Other Plans: You will be eligible to participate in certain
other management compensation plans, including the Management Severance Pay
Plan and Summary Plan Description as a Tier II executive, as such plans may be
amended from time to time.
8. Sign-on Bonus: In connection with your initial employment with the Company, you
were paid a sign on bonus of $80,000.00 (the "Sign-On"), less all applicable
withholdings and deductions required by law. In the event that you voluntarily resign
or the Company terminates your employment for "Cause," as defined below, in each
case within two years of the payment date for the Sign-On, you will reimburse the
Company the full Sign-On amount reduced on a pro-rata basis by one twenty-fourth
(1/24th) per full month of service. Any applicable repayment shall be made within
fifteen (15) business days following the effective date of your departure from the
Company.
9. Benefits: You will be eligible to participate in the Company's benefits program to the
same extent as other employees at your level. Our benefits program includes group
health, dental, vision, life/AD&D, long-term disability, short-term disability salary
continuation, paid holidays, flexible spending accounts, the Xxxxxxxx & Struggles, Inc.
401(k) Profit Sharing and Retirement Plan, and the Deferred Compensation Plan. You
will also be eligible to participate in the Company's Physical Examination and
Financial Planning Program. Your eligibility for all such programs and plans is
determined under the terms of those programs/plans. Any discrepancy between this
summary and the company's plan documents will be resolved in favor of the plan
documents. Our benefits program, compensation programs, and policies are reviewed
from time to time by Company management and may be modified, amended, or
terminated at any time.
10. Employment Authorization: Pursuant to the Immigration and Nationality Act, the
Company is required to verify the identity and employment authorization of all new
hires. In order to comply with this legal obligation, the Company must complete an
Employment Eligibility Verification Form I-9 within three days of an employee's hire
date. The Company acknowledges you have already provided the Company with
information that fulfills these requirements.
11. Business Expenses: The Company will reimburse you for your business expenses in
accordance with its policies.
12. Compliance with Policies: Subject to the terms of this Agreement, you agree that you
will comply in all material respects with all policies and procedures applicable to
similarly situated employees of the Company, generally and specifically.
13. Termination of Employment:
a. Employment at Will: You will be an "employee at will" of the Company,
meaning that either party may terminate the employment relationship at any
time for any reason (with or without cause or reason) upon written notice to
the other party. A period of notice shall only be required if it is expressly
provided in writing under written Company employment policies in effect at
the time of such termination.
b. No Notice Period in Case of Termination for Cause: Notwithstanding any
period of notice under written Company employment policies in effect at the
time of termination, the Company shall have the right to terminate your
employment for Cause immediately upon written notice.
c. Compensation Upon Termination: Upon the termination of your employment,
you will be paid your Base Salary up through your last day of work (the
"Termination Date"), and any other amounts required by law. You will also
be entitled to participate in the Management Severance Pay Plan as a Tier II
executive; as such plans may be modified or amended from time to time.
d. Definition of Cause: For purposes of this Agreement, "Cause" shall mean any
of the following: (i) your engagement, during the performance of your duties
hereunder, in acts or omissions constituting dishonesty, gross negligence,
fraud, intentional breach of fiduciary obligation or intentional wrongdoing or
malfeasance; (ii) your indictment of, or plea of nolo contendere to, a crime
constituting a (x) a felony under the laws of the United States or any state
thereof or (y) misdemeanor involving moral turpitude; (iii) your material
violation or breach of any provision of this Agreement; (iv) your unauthorized
use or disclosure of confidential information pertaining to the Company's
business; (v) any act or omission by you which results in the restatement of the
financial statements of HSII or a subsidiary of HSII; (vi) your engagement in
conduct causing demonstrable injury to the Company or its reputation; (vii)
your unreasonable failure or refusal to perform your duties as the Company
reasonably requires, to meet goals reasonably established by the Company or
its affiliates, or to abide by the Company's policies for the operation of its
business, and the continuation thereof after the receipt by you of written notice
from the Company; (viii) your habitual or gross use of alcohol or controlled
substances which interferes with the performance of your duties and obligations
on behalf of the Company; or (ix) your death or Disability, as hereinafter
defined. For purposes of this Agreement, "Disability" shall mean that you have
been unable, for six (6) consecutive months, to perform your duties under this
Agreement even with accommodation, as a result of physical or mental illness or
injury. The determination of whether the Executive has been terminated for
"Cause" will be made at the sole discretion of the HRCC.
e. Return of Materials: Upon the termination of your employment, you agree to
return to the Company, all Company property, including all materials
furnished to you during your employment (including but not limited to keys,
computers, automobiles, electronic communication devices, files and
identification cards) and all materials created by you during your employment.
In addition, you agree that upon the termination of your employment you will
provide the Company with all passwords and similar information that will be
necessary for the Company to access materials on which you worked or to
otherwise continue in its business.
14. Confidentiality: In the course of your employment with the Company, you will be
given access to and otherwise obtain knowledge of certain trade secrets and
confidential and proprietary information pertaining to the business of the Company
and its affiliates. During the term of your employment with the Company and
thereafter, you will not, directly or indirectly, without the prior written consent of the
Company, disclose or use for the benefit of any person, corporation or other entity,
or for yourself, any trade secrets or other confidential or proprietary information
concerning the Company or its affiliates, including, but not limited to, information
pertaining to their clients, services, products, earnings, finances, operations,
marketing, methods or other activities; provided, however, that the foregoing shall
not apply to information which is of public record or is generally known, disclosed
or available to the general public or the industry generally (other than as a result of
your breach of this covenant or the breach by another employee of his or her
confidentiality obligations). Notwithstanding the foregoing, you may disclose such
information as is required by law during any legal proceeding or to your personal
representatives and professional advisers as is required for purposes of rendering tax
or legal advice, and, with respect to such personal representatives and professional
advisers, you shall inform them of your obligations hereunder and take all
reasonable steps to ensure that such professional advisers do not disclose the
existence or substance thereof. Further, you shall not, directly or indirectly, remove
or retain, and upon termination of employment for any reason you shall return to the
Company, any records, computer disks or files, computer printouts, business plans
or any copies or reproductions thereof, or any information or instruments derived
therefrom, arising out of or relating to the business of the Company and its affiliates
or obtained as a result of your employment by the Company.
15. Non-Solicitation/Non-Competition: Without the prior written consent of the
Company, during the term of your employment with the Company and for a period of
six (6) months after the termination of your employment with the Company, either
unilaterally by you or by the Company for Cause, you shall not (i) become engaged in
or otherwise become interested in a role that provides or intends to provide similar
services in the geographical area served during your employment; (ii) directly or
indirectly solicit or assist any other person in soliciting any client of the Company
with whom you had direct professional contact during the twelve (12) months
immediately prior to the termination of your employment with the Company and
during which you learned confidential information, or whose account you oversaw
during your employment with the Company; (iii) directly or indirectly solicit, or assist
any other person in soliciting, any employee of the Company or its affiliates (as of
your termination of employment with the Company) or any person who, as of such
date, was in the process of being recruited by the Company or its affiliates, or induce
any such employee to terminate his or her employment with the Company or its
affiliates; or (iv) hire or assist another person in hiring any employee of the Company
or its affiliates who potentially possesses the Company's or its affiliate's confidential
information for a position where the employee's knowledge of such information might
be relevant. The provisions of this Section 15 shall be in addition to any restrictive
covenants that are set forth in or otherwise required by Company benefit plans. In the
case of a discrepancy between this Section and any such restrictive covenant, the more
restrictive language will apply.
Each of the foregoing restrictions contained in Section 15 constitutes an entirely
separate and independent restriction on you and shall be read and construed
independently of the other undertakings and agreements herein contained. You and the
Company agree that the restrictions contained in Section 15 are reasonable in scope
and duration and are necessary to protect the Company's confidential information and
other business interests. If any provision of Section 15 as applied to any party or to
any circumstance is adjudged by an arbitrator or court of competent jurisdiction to be
invalid or unenforceable, the same will in no way affect any other circumstance or the
validity or enforceability of this Agreement. If any such provision, or any part thereof,
is held to be unenforceable because of the scope, duration or geographic area covered
thereby, the parties agree that the court or arbitrator making such determination will
have the power to reduce the scope and/or duration and/or geographic area of such
provision, and/or to delete or revise specific words or phrases, and in its modified
form, such provision will then be enforceable and will be enforced.
16. The parties agree and acknowledge that the breach of Section 14 or 15 will cause
irreparable damage to the Company, and upon actual or threatened breach of any
provision of either section the Company will be entitled to seek from a court of
competent jurisdiction immediate injunctive relief, specific performance or other
equitable relief without the necessity of posting a bond or other security and that this
will in no way limit any other remedies which the Company may have (including,
without limitation, the right to seek monetary damages).
17. Other Legal Matters:
a. No Other Agreements/Obligations: You have advised the Company that your
execution and performance of the terms of this Agreement do not and will not
violate any other agreement binding on you or the rights of any third parties
and you understand that in the event this advice is not accurate the Company
will not have any obligation to you under this Agreement.
b. Negotiation of Agreement: You acknowledge that you negotiated the terms of
this Agreement with the Company and that you enter into this Agreement
voluntarily.
c. Applicable Legal Standards: You will be an employee of the Company's
United States operations and agree that the laws of the United States of
America and the State of Illinois shall govern your employment with the
Company.
d. Waiver of Jury Trial: Each of the parties hereto irrevocably waives any and
all rights to trial by jury in any legal proceeding arising out of your
employment or related to this Agreement or the transactions contemplated
hereby.
e. Notice: All notices and other communications under this Agreement shall be
in writing to you at the above-referenced address or to the Company at its
Chicago Corporate Office, directed to the attention of the General Counsel.
f. Full and Complete Agreement: This letter Agreement contains our entire
understanding with respect to your employment and can be amended only in
writing and signed by the General Counsel. This Agreement supersedes any
and all prior agreements, whether written or oral, between you and the
Company that are not specifically incorporated by reference herein. You and
the Company specifically acknowledge that no promises or commitments
have been made that are not set forth in this letter.
g. Severability: If any provision of this Agreement or the application thereof is
held invalid, such invalidity shall not affect other provisions or applications of
this Agreement that can be given effect without the invalid provision or
application and, to such end, the provisions of this Agreement are declared to
be severable.
h. Survival of Provisions: The provisions of Sections 13 (b) and (c) and 14
through 16 of this Agreement shall survive the termination of your
employment with the Company and the expiration or termination of this
Agreement.
[Signature page follows]
Xxxxx, I wish you all the best in your new role.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Executive Vice President and Chief Financial Officer
I hereby accept the terms and conditions of promotion and employment outlined in this
Agreement.
/s/ Xxxxx Xxxxxxx May 8, 2013
_______________________ _______________________
Xxxxx Xxxxxxx Date
Copy: L. Xxxxx Xxxxx, President & Chief Executive Officer
Xxxxxxx X. Xxxxx, General Counsel, Chief Administrative Officer and Secretary
